3816.HK WACC - Weighted Average Cost of Capital

The WACC of KFM Kingdom Holdings Ltd (3816.HK) is 5.8%.

The Cost of Equity of KFM Kingdom Holdings Ltd (3816.HK) is 6.30%.

The Cost of Debt of KFM Kingdom Holdings Ltd (3816.HK) is 5.35%.

	Range	Selected
Cost of equity	5.40% - 7.20%	6.30%
Tax rate	24.30% - 28.60%	26.45%
Cost of debt	5.10% - 5.60%	5.35%
WACC	5.0% - 6.5%	5.8%

WACC

3816.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.42	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.20%

Tax rate	24.30%	28.60%
Debt/Equity ratio	0.31	0.31
Cost of debt	5.10%	5.60%

After-tax WACC	5.0%	6.5%


Selected WACC	5.8%

3816.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 3816.HK:

cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.